How to handle your investments and bounties this tax filing season?

Swagat Sarma

Jul 26, 2023 • 1 min read

Gold bounties

Gold bounties are the same as normal gold in the eyes of the taxman. Each time you do a transaction on Anq, we buy the gold and pay the taxes on it. Therefore, when you sell your gold, there is no further GST requirement on the gold amount.

However, when you sell your gold, you do create a taxable event.

Gold is taxed in the following way in India:

Short-term capital gains (STCG): If you sell gold within three years of purchase, you will be liable to pay STCG. STCG is taxed at your applicable income tax slab.
Long-term capital gains (LTCG): If you sell gold after three years of purchase, you will be liable to pay LTCG. LTCG is taxed at 20%, but you can claim indexation benefits to reduce your tax liability.

BTC Bounties

BTC bounties are treated the same as normal BTC in India, and the same taxation structure is enabled. When you withdraw BTC to your wallet, since you are transferring between your wallets, there is no tax implication on your transfer.

However, from your personal wallet, whenever you off ramp to fiat, there is the following tax implication:

30% tax on gains from transfer of virtual digital assets: Any gains made from the transfer of virtual digital assets (VDAs), such as BTC, are taxed at a flat rate of 30%. This includes gains made from selling, exchanging, or spending BTC.
1% TDS on transfer of VDAs: A 1% tax deducted at source (TDS) will be applied on the transfer of VDAs, if the transactions exceed ₹50,000 (or even ₹10,000 in some cases) in the same financial year.
No deduction allowed: No deduction, except the cost of acquisition, will be allowed while reporting income from transfer of digital assets. Which means, you can set off the issual price of the BTC as cost of acquisition, and save on taxes.
Losses cannot be set off: Losses incurred from one virtual digital currency cannot be set-off against income from another digital currency.